Fonterra Co-op, the largest New Zealand (NZ) dairy co-op, lifted an already record high milk price this week to forecast a final milk price between NZ$8.90 and NZ$9.50/kg MS, up from NZ$8.40 to NZ$9.00.
This increases the midpoint of the range, which kiwi farmers are paid off, by 50c to NZ$9.20/kg MS. This price is equivalent to almost 38c/litre in Irish money when converted for currency and milk solids.
The base milk price in the December milk league published this week for Ireland is 38.1c/litre. Remember, the NZ dairy year is coming to an end at the moment, while the European spring kicks into gear.
This news from NZ this week will be very welcome for farmers there and shows the strength in dairy markets at the moment.
Fonterra CEO Miles Hurrell says the lift in the 2021/22 forecast farmgate milk price range is good news for both farmers and NZ communities. The new midpoint would contribute $13.8bn to the NZ economy this season.
He said: “The increase is the result of consistent demand for dairy at a time of constrained global milk supply. Overall, global milk supply growth is forecast to track below average levels, with European milk production growth down on last year and US milk growth slowing due to high feed costs. It’s a similar supply picture in New Zealand.”
Meanwhile, back home, the gap between the Ornua index and what co-ops pay is under the spotlight this week as total figures for 2021 come available (see p3).